Philippines May Lose 400,000 Tons Rice Output, Official Says

The Philippines, the world’s biggest rice importer, may lose as much as 400,000 metric tons from its first crop this year as an El Nino event reduces rainfall in some provinces, a government official said.

Some farmers may switch to other crops if water flows to regions distant from dams are restricted “under extreme conditions,” Joel Rudinas, acting agriculture undersecretary for operations, said in a phone interview from Manila today. The Philippines has two rice crops a year, with the 2009 first harvest yielding 7.4 million tons.

Imports by the Southeast Asian nation may jump to a record 3 million tons this year, from 1.78 million tons, if El Nino parches crops or another typhoon hits the country, National Food Authority Spokesman Rex Estoperez said in November. The country has so far secured 2.2 million tons from overseas suppliers for delivery this year, he said Jan. 8. The Philippines advanced purchases after storms slashed production in 2009.

“I think they will return to the market only in June when prices have softened,” Rakesh Singh, a trader at Emmsons International Ltd. in New Delhi, said by phone today. “It doesn’t make sense for them to enter the market at this moment because prices are already high,” he said.

El Nino, the weather pattern that can reduce rainfall or prolong the dry season in parts of Asia, also threatens to curb output in Thailand, potentially limiting the capacity of the world’s biggest rice exporter to boost shipments to meet additional demand.

The export price of the 100 percent grade-B Thai white rice, the benchmark in Asia rose 16 percent to $609 a ton in the week of Jan. 13 from last year’s low.

Rice Futures

Rice futures in Chicago rose to a record in April 2008 and the Asian benchmark export price reached its highest level a month later as the Philippines boosted imports and exporters including India and Vietnam curbed shipments, adding to concerns of food shortages that sparked protests from Haiti to Egypt.

Rough rice has jumped 25 percent in Chicago from last year’s low as the Philippines advanced imports after storms wiped out 1.3 million tons of the nation’s crops. The March- delivery contract closed at $13.975 per 100 pounds on Jan. 15. Trading is suspended today for a public holiday.

Acting Philippines Socioeconomic Planning Secretary Augusto Santos said El Nino may cause a “water crisis,” curbing the nation’s agricultural production and hurting the domestic economy, the Manila Times reported today.

Northern Luzon’s Isabela province, the nation’s second- largest rice producer, is most at risk from production losses because of the dry weather, Rudinas said.

Cloud Seeding

El Nino “at its worst” would definitely affect the Philippines rice shortfall, he said. Still, steps such as cloud seeding are being planned to boost water supply in rice areas, he said.

The water level in Angat dam, which supplies 97 percent of water in the capital region dropped 5 percent to 201.43 meters as of Jan. 13 because of El Nino, the Manila Times reported. If the decline continues, water supply from the dam to farms in Bulacan and Pampanga may be cut, the newspaper said, citing the Metropolitan Waterworks and Sewerage System.

Rice output in Bulacan and Pampanga is “sizeable,” Rudinas said, without citing volumes.